June 26, 2003	Thursday	Rabi-us-Sani 25,1424

KARACHI, June 25: The State Bank has asked all banks and DFIs to ensure that returns on investments and deposits are declared and paid within 20 days of closing of the half year to which they relate.

A circular issued by the central bank on Wednesday reminds the banks and DFIs to ensure further that returns are paid strictly in accordance with the principles of Shariah “and after they have fully met and provided for all the actual and accrued expenses of the related period.”

The SBP has asked banks and DFIs to obtain a certificate from their external auditors within five months of the close of their accounting year for half year ending June-December each year.

It has also asked them to keep this certificate in their record to be inspected by the SBP inspection teams.

The SBP circular says that Islamic banks and Islamic banking branches of the existing banks would also obtain a certificate from their external auditors on annual basis. That certificate will certify that the profit distributed among the depositors has been calculated in accordance with the policy approved by their Shariah board or Shariah adviser or Shariah committee — as the case may be.

The circular says that banks/DFIs shall not only determine on their own the returns payable to investors and depositors of funds with them, but will also ensure “that returns are paid strictly in accordance with the principles of Shariah.”

The circular has been issued in suppression of BPRD circular No 14 of June 16, 1998, as amended from time to time and subsequent instructions issued on this subject.